Trump's new transparency rules for healthcare pricing get push back from industry

November 18, 2019
by Thomas Dworetzky, Contributing Reporter
New rule changes for hospitals and insurers announced Friday by the Trump administration could make hospital charges to insurers available to consumers — but some in the industry are raising concerns and filing suit.

“Our goal was to give patients the knowledge they need about the real price of healthcare services. They’ll be able to check them, compare them, go to different locations," President Trump said at a White House announcement of the changes, according to CNBC.

One rule that has been proposed would apply to plans found both in the exchanges and those sponsored by employers, and would force them to disclose the deals they have negotiated with providers both in and out of network. That rule is set to become policy January 2021.

The changes would also force insurance companies to make real-time pricing available online to patients, including out-of-pocket expenses before care is received.

Matt Eyles, president and CEO of America’s Health Insurance Plans, advised that his organization supports “clear, consistent and concise information that is customized to an individual’s circumstances.”

But transparency, he argues, could backfire. “Transparency should aid and support patient decision-making, should not undermine competitive negotiations that lower patients’ healthcare costs, and should put downward pressure on premiums for consumers and employers,” Eyles told CNBC.

The administration has made transparency of pricing a key part of its healthcare efforts.

The latest efforts, noted Health and Human Services Secretary Alex Azar, “may be a more significant change to American healthcare markets than any other single thing we’ve done.”

Four major hospitals groups announced shortly after the White House event that they would be suing to prevent the rules from taking effect. These include the American Hospital Association. The groups have made the case that they have a legal right to cut deals with insurers "without unwarranted government intrusion," according to CNBC.

CMS Administrator Seema Verma pointed out that the information insurers need to disclose is already in the explanation of benefits statement sent to a patient — the new rule just means that it will be available before and not after the charge is incurred.

"We’re just requiring that it’s available before care, and not after," Verma said, according to CNBC.

The rule would have hospitals post online costs for 300 common services, like X-rays and other tests.

Despite pushback from industry, some experts argue that transparency is the last possible solution to soaring prices — before turning to price controls — by the government.

"There’s no other hope," Robert Berenson, a health policy expert from the Urban Institute, told CNBC, adding, "if this doesn’t work, you’ve got to go to price regulation. These prices are just crazy."

In January, the administration made hospitals post prices online, so that the “healthcare consumer,” aka patients, could shop around for the best deals. The list posted by institutions is called a “chargemaster”.

But there is a rub with such a list. “I don't think it's very helpful,” Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management, said at the time. “There are about 30,000 different items on a chargemaster file. As a patient, you don't know which ones you will use.”

The lists are part of a push by the Trump administration to reform healthcare. In a speech in July, 2018, Verma laid out its goals as follows:

“This administration is guided by four pillars; empowering patients, increasing competition, realigning incentives, and reducing barriers to value-driven care. As we transition to a system that delivers value to patients, we must start at the basic level of the interaction that a patient experiences when walking into a doctor’s office. We must cater to the needs of the patient, not providers.

“Our goal is to activate the most powerful force in our healthcare system for creating value: the patient.”